Watson,Inc The Beginning Finished Goods Inventory Costs Were $3,800 Under Absorption

question 202

Multiple Choice

Watson,Inc.has collected the following data for the current year: $$\begin{array} { | l | r | } \hline \text { Beginning Finished Goods Inventory } & 70 \text { units } \\\hline \text { Units produced } & 510 \text { units } \\\hline \text { Units sold } & 580 \text { units } \\\hline \text { Sales price } & \$ 160 \text { per unit } \\\hline \text { Direct materials } & \$ 31 \text { per unit } \\\hline \text { Direct labor } & \$ 16 \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 12 \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,600 \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 5 \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,500 \text { per year } \\\hline\end{array}$$ The beginning Finished Goods Inventory costs were $3,800 under absorption costing and $2,500 under variable costing.
What is the operating income using absorption costing? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

• A) $42,310
• B) $26,910
• C) $39,410
• D) $3,800

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Definitions:

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Standard Deviation

A measure of dispersion or variability that quantifies how much individual data points deviate from the mean of a dataset.

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Referring to a bell-shaped curve distribution where data are symmetrically distributed around the mean, implying most data points are close to the mean and fewer are near the extremes.

Automobile Battery

A rechargeable battery that supplies electrical energy to a motor vehicle, primarily used for starting the engine and powering accessories.